Self-Employed Lending during Covid
Self-employed borrowers have had it tough throughout COVID. While getting approved for a home loan or refinance has long been more challenging for small business owners compared to PAYG borrowers, the pandemic made things even more difficult as lender after lender turned away from loan products catering to this segment of the market.
So, it’s little surprise that those who stuck with self-employed lending have seen impressive growth over the past 18 months. Rate Money is one such example. CEO and co-founder Ryan Gair (pictured) told MPA that where many mainstream lenders saw risk, they saw opportunity.
“In this current climate of COVID this year and last year, a lot of the mainstream lenders have not really wanted to work with the self-employed sector, and we’ve seen an opportunity to work with them and help them out,” he said. “The way I look at it is, if you’re self-employed, you’re not going to fire yourself – you’re probably going to fire yourself last if you need to. They’re going to do anything and everything they can to keep making money for their business, keep paying their mortgages and whatever it might be.”
He said the great Australian dream has changed over time. In the 70s and 80s, it was all about buying your own house and paying it off. Now, it is more around working for yourself and being your own boss – something brokers are sure to relate to. As a result, there are a lot of self-employed Australians out there, many of whom will need finance at different stages of their lives. Not only is this a massive opportunity for lenders who cater to self-employed borrowers, it is also a wealth of opportunity for mortgage brokers.
“Right now, there is a big opportunity to specialise yourself in self-employed,” said Gair. “There are so many self-employed applicants who are doing well, who might need a little bit of help – there’s a whole mixture out there, and they’re looking to either refinance, save some money, potentially buy another property or inject back into their business because they know their good times are about to come again.
“Self-employed can, of course, be a lot more complex than your typical PAYG applicant who supplies two payslips. There are all sorts of different structures.”
But if you get it right for a self-employed client, said Gair, chances are they will refer you readily to friends and family.
“If you understand self-employed lending and the policies and niches out there, there’s plenty of Aussies that want help,” he said.
by Kate McIntyre